It keeps regional bread delivery contractors running and ends up with more Tasmanians in more locations employed - and gives more locations access to Cripps products.

That's according to Cripps Bakery chief executive Paul Gadomski who was welcoming an announcement made by the Tasmanian Government about the extension of the Buy Local economic and social benefits test.

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Treasurer Michael Ferguson and Small Business Minister Madeleine Ogilvie on Monday announced the extension of the test, which aims to increase the total number of Tasmanian business procurement for government services.

Mr Ferguson said the government was the biggest procurer of goods and services in the state, but now this scheme would make it easier for Tasmanian businesses to bid for tender.

"What it means is that, for the first time, businesses can actually get credit for the fact, they employ local that they put fuel in their trucks locally, that they will be supporting local sports teams," Mr Ferguson said.

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"And of course, by having a greater level of economic activity in a Tasmanian base business, as opposed to a business-based in another state or territory or overseas, we're actually being able to give them the credit for the impact that their business is having in our local community."

The social and economic benefits test was introduced two years ago as a COVID-19 pandemic measure to support small business, and over the time the weighting for the test has increased from 10 to 25 points when bidding for tender.

Mr Gadomski said Cripps had won a tender to supply bread for the Department of Health and Human Services, which means bread from his factory is served in every major hospital, along with state-run aged care homes and some public schools.

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He said the tender equated to about 4000 loaves of bread per week, and as such, was not a large portion of the overall output.

"In terms of our overall total it's not huge, but what it does do is supply some of our more regional delivery runs; all of our delivery drivers are contractors," he said.

"So, it keeps more money in the state and keeps more Tasmanians employed in jobs."

Small Business Minister Ms Ogilvie said she was "overjoyed" to see the policy extended and she thanked the Treasurer for his support.

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The policy move was also welcomed by the Launceston Chamber of Commerce, who said it really gave business a boost and advantage on tender procurement.

Mr Ferguson said it demonstrated a government that was "walking the walk on buying local".

"This policy is one, that is a real really important centrepiece for the Tasmanian Liberal government. It helps our businesses have confidence to know that they can grow their business right here and to get these contracts in place with government is a boon."

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